Dfi Properties LLC v. Gr 2 Enterprises LLC

2010 UT 61, 242 P.3d 781, 668 Utah Adv. Rep. 14, 2010 Utah LEXIS 161, 2010 WL 4293076
CourtUtah Supreme Court
DecidedNovember 2, 2010
Docket20081067
StatusPublished

This text of 2010 UT 61 (Dfi Properties LLC v. Gr 2 Enterprises LLC) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dfi Properties LLC v. Gr 2 Enterprises LLC, 2010 UT 61, 242 P.3d 781, 668 Utah Adv. Rep. 14, 2010 Utah LEXIS 161, 2010 WL 4293076 (Utah 2010).

Opinion

242 P.3d 781 (2010)
2010 UT 61

DFI PROPERTIES LLC, Plaintiff and Appellee,
v.
GR 2 ENTERPRISES LLC, Defendant and Appellant.

No. 20081067.

Supreme Court of Utah.

November 2, 2010.

*782 Carolyn Montgomery, Thomas B. Price, Salt Lake City, James H. Woodall, South Jordan, for plaintiff.

Karthik Nadesan, Salt Lake City, for defendant.

DURRANT, Associate Chief Justice:

INTRODUCTION

¶ 1 We are asked to decide whether a trial court judge abused his discretion in entering default judgment against a defendant in an unlawful detainer action. The defendant, GR 2 Enterprises, is a limited liability company whose possession of certain real property was being disputed. In the course of the unlawful detainer action, one of the owners of GR 2 engaged in behavior that the district court, sua sponte, concluded was sanctionable under rule 11 of the Utah Rules of Civil Procedure. Having reached this conclusion, the court sanctioned the defendant by entering default judgment against it.

¶ 2 On appeal, it has become clear to this court that we lack subject matter jurisdiction over the matter. The judgment entered by the district court, although presented to us as final, explicitly reserves a number of issues, including the award of attorney fees, for later consideration by the district court. Because a judgment is not final for purposes of appeal if the judgment fails to resolve an outstanding request for attorney fees, we conclude that the order from which GR 2 appeals is not final. And because this court lacks jurisdiction over appeals from nonfinal orders, we do not have the authority to examine the issues raised in this appeal. Accordingly, we dismiss the appeal for lack of jurisdiction and remand this case to the district court.

BACKGROUND

¶ 3 In setting forth the background of this appeal, we limit our exposition to the facts necessary to explain our conclusion. Further, because default judgment was entered on the eve of trial, the facts that gave rise to the wrongful detainer action remain disputed. Therefore, we do not pass judgment on the facts of the underlying dispute and proceed with caution to avoid inadvertently suggesting that we have done so.

¶ 4 GR 2 Enterprises is the name of a limited liability company formed by Juan Antonio Granados for the purpose of handling certain real estate transactions related to real property owned by Mr. Granados. Mr. Granados and his wife own GR 2.

¶ 5 DFI Properties is another limited liability company. DFI refinanced property owned by GR 2 in California so that GR 2 could purchase property in Utah. When GR 2 purchased the Utah property, DFI was the beneficiary of the trust deed. When GR 2 defaulted under the terms of this trust deed, *783 DFI purchased the property at a trustee's sale.

¶ 6 Throughout the course of these events, GR 2 took a number of actions that complicated DFI's ultimate acquisition of the property. For instance, GR 2 conveyed to multiple third parties fractional interests in both the Utah and California properties. These third parties then filed for bankruptcy. Pursuant to the automatic stay provision of the bankruptcy code, the trustee's sale of the Utah property was postponed. The California bankruptcy court ultimately concluded that these actions were undertaken to "delay, hinder, and defraud creditors." Even after this automatic stay was lifted, the trustee's sale could not proceed because GR 2 filed a separate bankruptcy action in Utah, which resulted in a separate automatic stay of proceedings against GR 2. The automatic stay imposed in connection with the Utah bankruptcy proceedings was also eventually lifted, at which point DFI purchased the Utah property at a trustee's sale. DFI then filed an unlawful detainer action seeking eviction of GR 2 from the Utah property.

¶ 7 GR 2 defended and counterclaimed on a number of grounds and alleged significant misconduct on the part of DFI. Chiefly, GR 2 asserted that DFI had fraudulently induced GR 2 to enter into the refinancing agreement and that this fraud made the deed of trust invalid. GR 2 also asserted that DFI's unlawful detainer action constituted abuse of process because DFI was aware that the deed of trust was being challenged in the Utah bankruptcy proceedings.

¶ 8 Even after the claims were properly before the district court, complications arose. First, in the Utah bankruptcy action, the bankruptcy trustee had moved to set aside the sale through which DFI acquired the property. Proceedings in the district court were postponed until the bankruptcy court's disposition of this issue. When the bankruptcy trustee's motion was denied in the ancillary bankruptcy proceeding, the district court, satisfied that the unlawful detainer action could proceed, established time lines for proceeding to trial. The trial was scheduled to begin on December 17, 2008.

¶ 9 The second complicating factor arose when GR 2 objected to this trial date on the basis that it could not conduct, in the time allowed, sufficient discovery to support its counterclaims and affirmative defenses. GR 2 sought to postpone the trial by several months so that it could undertake additional discovery. This request, though, would have conflicted with the expedited time line established by statute for resolving unlawful detainer actions. So the parties proceeded as if the trial were going to begin on December 17, 2008. But as trial approached, the district court offered to adopt GR 2's proposed time line if GR 2 would vacate the property. On December 4, 2008, GR 2 was given the option of proceeding with the expedited time line on the unlawful detainer claim, or vacating the property by December 5, 2008, in exchange for postponing the entire matter for a few months while GR 2 conducted discovery related to its counterclaims. The court scheduled a conference for the afternoon of December 8, 2008, so that counsel for GR 2 could inform the court of its client's decision.

¶ 10 On the morning of the scheduled conference, Mr. Granados, acting without counsel, filed three documents with the district court. These documents, an "Order for Hearing to Show Cause," an "Order to Stay Proceedings," and a "Petition for Hearing to Show Cause, Stay of Proceedings, and for Declaratory Relief," were signed by Judge Clayton of the "First Federal District Court, Western Region." This court is neither a state court nor a federal court. Rather, it is a tribal court of the NATO Indian Nation. The documents asserted that Mr. Granados was a member of the tribe and that, pursuant to certain aspects of federal law, tribal courts have exclusive jurisdiction over matters involving tribe members. Based on this purported exclusive jurisdiction, the documents ordered the district court to stay the proceedings pending resolution of the matter in tribal court.

¶ 11 The district court held a hearing the next day. To be sure that Mr. Granados would appear, the district court judge instructed counsel for GR 2 to inform Mr. Granados of the nature of the hearing and *784 the possibility of sanctions. Mr. Granados appeared at the hearing and addressed the court regarding his motives for filing the NATO Nation documents. The judge found that "there[] [was] no reasonable basis to believe that [the] documents [were] anything other than frivolous," and that the "only reason" they were submitted to the district court "was to delay [the] proceedings." Based on that finding, the district court struck the defendant's answer and counterclaim, and entered default judgment against the defendant. The district court also entered an order of restitution.

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Bluebook (online)
2010 UT 61, 242 P.3d 781, 668 Utah Adv. Rep. 14, 2010 Utah LEXIS 161, 2010 WL 4293076, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dfi-properties-llc-v-gr-2-enterprises-llc-utah-2010.